2019 (7) TMI 1119 - HC - Law of Competition

Court Upholds CCI Orders on Cartel Case Despite No Judicial Member Involvement.

Cadd Systems And Services Private Limited Versus Competition Commission Of India

The court dismissed the petition challenging the validity of orders passed by the Competition Commission of India (CCI) without a judicial member. It ... Jurisdiction - petitioner contends that the impugned orders were passed without the presence of a judicial member - Section 19(l)(a) of the Competition Act, 2002 - HELD THAT:- As per the provisions, no Act or proceedings of CCI would be invalid by reason of any vacancy or any defect in its constitution. Thus, notwithstanding, that a judicial member is required to be appointed to CCI, the orders passed by the CCI pending such appointment cannot be called into question. In the present case, the petitioner had participated in the proceedings before CCI and it has reserved orders after hearing submissions made on behalf of the parties. It is clearly not open for the petitioner to now seek a rehearing of the matter after appointment of a judicial member. The petitioner’s contention that the functioning of CCI would not be paralysed if it is interdicted from passing final orders, is unmerited. Whilst, it is correct that CCI is also required to pass administrative orders as well, its principal function is to dispose of cases instituted either on an information or complaints. Plainly, interdicting CCI from passing final orders would effectively bring its functioning to a standstill. Petition dismissed. Issues:1. Impugning orders passed by CCI without a judicial member.2. Allegations of cartelization in a tender process.3. Requirement of a judicial member in CCI.4. Validity of orders passed by CCI in the absence of a judicial member.Analysis:Issue 1: Impugning orders passed by CCI without a judicial memberThe petitioner challenged orders dated 23.04.2019 and 08.05.2019 passed by CCI in a case involving cartelization allegations. The petitioner contended that the orders were adjudicatory and required the presence of a judicial member as per legal requirements.Issue 2: Allegations of cartelization in a tender processNagrik Chetna Manch filed a complaint under the Competition Act, 2002, alleging cartelization in a tender process involving the petitioner and other parties bidding for a project. CCI directed an investigation based on a prima facie order and received a report concluding collusive behavior among the parties.Issue 3: Requirement of a judicial member in CCIThe petitioner argued that the absence of a judicial member during the final hearing of the case was a violation of legal principles established by previous court judgments. The petitioner emphasized the necessity of a judicial member in adjudicatory matters as per the law.Issue 4: Validity of orders passed by CCI in the absence of a judicial memberThe respondent countered the petitioner's arguments by citing legal provisions and previous court decisions. The respondent highlighted that the functioning of CCI should not be paralyzed due to vacancies and that the orders passed by CCI should not be invalidated solely based on the absence of a judicial member. The court upheld the respondent's arguments, emphasizing that the orders passed by CCI were valid despite the absence of a judicial member, as per Section 15 of the Act.In conclusion, the court dismissed the petition, stating that the orders passed by CCI without a judicial member were valid and not subject to challenge solely based on the absence of a judicial member. The court emphasized the importance of CCI's functioning and clarified that the orders should not be invalidated due to procedural defects.